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US trade pact causes row in Peru


US trade pact causes row in Peru

13 April 2006

Ollanta Humala, frontrunner in Peru’s presidential election.
Mr Humala says the deal should be put to a popular vote
Peru’s decision to sign a free-trade agreement with the US has provoked a domestic political row, with critics calling for the deal to be blocked.

The deal, signed by President Alejandro Toledo in Washington, is politically sensitive, coming in the middle of presidential elections in Peru.

Ollanta Humala, who is currently leading after the first ballot, urged Peru’s Congress to block the deal.

Supporters say it will boost trade, but critics warn it will threaten jobs.

’Poorly drafted’

Mr Humala, the ex-army officer who is the frontrunner with 31% of votes counted so far, said he was not opposed to a deal in principle.

But he said the agreement was wrong for Peru in its current form and should be redrafted.

"We are in favour of a trade deal with the US and with different nations," he said.

"What has happened is this commercial deal was poorly negotiated."

Peru should hold a referendum to allow people to have their say on the deal before Congress debated it, he added.

Alan Garcia, who has won 24.5% of the vote so far, also said the deal should be modified, but third-placed candidate Lourdes Flores is supporting the agreement.

Critics have warned that the deal could see subsidised US imports such as rice, cotton and syrup flooding into Peru.

Unions fear this could overwhelm Peruvian farmers and small producers, resulting in thousands of job losses.


President Toledo, whose mandate expires in July, said the deal was essential to improving exporters’ prospects and maintaining Peru’s current strong rate of economic growth.

"I think the Congress will approve it," he said after signing the agreement alongside US Trade Representative Rob Portman.

"You have to redistribute but you have to redistribute it inside democracy," he added.

The agreement is similar to a 2003 deal between the US and Chile, which at the time was fiercely opposed by Chilean labour groups.